Super-variable costing only considers totally variable costs to be part of the cost of inventory. All other costs are charged to expense in the period incurred. This typically means that only direct materials are included in the cost of inventory. Super-variable costing is only usable for internal reporting purposes, since it is not allowed under GAAP or IFRS. For external reporting purposes, factory overhead must also be allocated to the cost of inventory. Because of this issue, super-variable costing has seen limited application.
Super-variable costing is also called throughput costing.